Salary Budget Advances Expected to Plateau in
2008

August 2, 2007 (PLANSPONSOR.com) - Workplace salary
budgets - the total amount allocated for all employee
salaries - are expected to reflect a 3.9% increase this year
and the same hike in 2008, a new survey showed.

A news release from the Scottsdale, Arizona-based
WorldatWork said salary budget increases have risen one-tenth
of a percent each year since 2004. The HR professionals
industry group on Thursday released its latest
Salary Budget Survey.

“Modest 2007 salary budget increases of 3.9%, which
are expected to plateau in 2008, present a challenge for
managers,” said Anne C. Ruddy, president of WorldatWork, in
the news release. “They will have to think more
holistically and learn the art and science of ‘total
rewards’ to attract, motivate and retain talent.”

Washington
, D.C.
employers reported the highest total salary budget
increase (4.1%) of all the surveyed metro areas. The biggest
increase from 2006 to 2007 (3.7% to 4%) occurred in Houston,
according to the study.

According to the news release, other findings
include:

As in 2005 and 2006, the largest salary budget
increases this year are targeted for
officers/executives, outpacing workers in the three
other employee categories, i.e. nonexempt hourly
nonunion, nonexempt salaried, exempt salaried. In 2007,
officers and executives experienced salary budget
growth
above
4% for the first time in six years.

Among major industries surveyed, public
administration had the largest actual salary budget
hike (4.3%) this year. The smallest hikes (3.7%) were
found in the transportation/utility and retail
sectors.

The percentage of organizations using variable
pay increased slightly from 79% in 2006 to 80% in 2007,
continuing a steady upward trend in the use of
compensation that is contingent on performance or
results achieved.

According to the news release, salary budgets do not
include other employment hard costs, i.e. medical/dental
insurance, payroll taxes, 401(k) match, etc. Base pay
increases may come from merit increases, cost of living
increases and general increases (promotional increases are
excluded).

The data includes results for the United States and
Canada, major metropolitan areas in the two countries,
major industries as well as data by organization size,
WorldatWork said.

The full study can be ordered by calling 877-951-9191
or online
here
.